Deloitte announces results of the 2011 Deloitte China Risk Intelligence Recognition Awards
25 winning enterprises demonstrated improvement in risk managementDOWNLOAD
Publish date: 1 March 2012
Professional services firm Deloitte today announced the results of the 2011 Deloitte China Risk Intelligence Recognition Awards and released the "Chinese Enterprise Risk Management White Paper" ("White Paper"). In 2011, 25 enterprises from different industries have been awarded for their outstanding risk management practice. At the same time, the White Paper stated that outstanding Chinese enterprises had already started to combine risk management with corporate governance. The comprehensive integration, taken in both the governance and strategic levels, has somewhat helped strengthen their standard of risk management.
Co-organized by Deloitte China and School of Economics and Management at Tsinghua University, the Deloitte China Risk Intelligence Recognition Awards is open to all Chinese Mainland enterprises. The award program aims to provide a platform for high-level exchange of risk management experiences and to encourage continued improvement of risk management among Chinese enterprises. The judging panel is comprised of experts with in-depth knowledge in risk management theory and extensive experience in risk management practice. Participating companies are rated with reference to the Risk Intelligence Maturity Model, a diagnostic tool which adopts nine principles defined by Deloitte in three major areas: risk governance, risk infrastructure and oversight, and risk ownership.
At the 2011 China Risk Intelligence Recognition Awards ceremony, Deloitte announced the results and launched the White Pater, which is based on the findings of the survey conducted during January and February 2012 about the risk management of Chinese enterprises. The White Paper discussed certain key issues faced by Chinese enterprises, including governance structure, risk framework, risk management accountability and some specific risk management practices. The survey covered enterprises across different ownership structures and industries. This year’s White Paper invited two companies to share their risk management experience, which can hopefully provide insights for Chinese companies going overseas and multinational companies stepping into the China marketplace.
"In 2010, Deloitte successfully hosted the Inaugural China Risk Intelligence Recognition Awards in Beijing. We hope to provide an experience sharing platform for companies, which are active and innovative in risk management. We, therefore, continue to organize the program for the second year. In view of the increasingly complex environment and heightened regulatory requirements, we hope that our risk intelligence award program will serve as a platform to help companies effectively cope with risk challenges and support them to enhance their management and create values," said Mr. Danny Lau, Managing Partner of Enterprise Risk Services for Deloitte Greater China.
This year's winning companies (see Winners List in Appendix, tabulated in no particular order) covered a wide range of industries, including petroleum, telecommunications, energy, chemicals and media. Two winners – Sinoma International Engineering Co., Ltd and China South Publishing & Media Group Co., Ltd.– shared their risk management experience in the White Paper.
"Risk-intelligent enterprises are those that can turn crises into opportunities based on innovative thinking and offer a more comprehensive, relevant and industry-focused perspective for their management to evaluate risk and pursue growth by taking strategic risks. While the award winners can further improve in risk management, we believe that these companies have been constructive and innovative in certain risk management areas. Furthermore, it has been encouraging to see many of these companies moving towards an integrated risk management approach," continued Mr. Lau.
According to the findings in the White Paper, most of the surveyed enterprises have already developed a relatively comprehensive risk management practice due to tightened regulatory requirements for risk management and internal control in recent years. Nearly 70% of those surveyed believe that they have a standard definition of risks, and have applied an integrated risk management strategy.
The alignment of risk management frameworks within a company under the industry's leading standards (such as COSO-ERM, Australia/New Zealand Standards, ISO31000) will help the company adopt a more sophisticated approach for risk management. Nearly 70% of the respondents "strongly agree" to adopt integrated and detailed processes for continuous improvement with reference from internal reviews, internal/external assessments, users' feedbacks, complaints and other issues. This reflects the positive impacts from comprehensive risk management efforts over the years. However, 30% expressed a "neutral" view, reflecting the mixed opinions on risk frameworks within the enterprise.
From a governance perspective, a well-defined allocation of risk management responsibility is one of the fundamental factors for successful implementation. More than 60% of the respondents said they had set up a special organization authorized by the board of directors and the governance body to ensure transparency of their risk management practice. Similar to a risk committee, it is comprised of delegates from various business units or departments of the enterprise, such as senior leaders and department heads. Another 30% of the respondents expressed a "neutral" view; they may not have set up a conventional organization under the board but there are functions similar to a provisional committee.
"As you can see from the survey findings, it is not difficult to notice that Chinese companies have made significant improvement in risk management. Along with the continuous growth of Chinese enterprises, there will be more uncertain or unknown risks. Companies should understand and develop risk intelligence in order to achieve strong growth, which is the reason for promoting our Risk Intelligence Recognition Awards program," Mr. Lau concluded.
Winners of 2011 Deloitte China Risk Intelligence Recognition Awards (Not in any particular order)